Secondary Education Awards – Annual wage review 2016

July 11, 2016

The Fair Work Commission has completed in its Annual Wage Review decision which has resulted in wage increases under awards that apply to secondary schools engaging employees under the Educational Services (Schools) General Staff Award 2010  and the Educational Services (Teachers) Award 2010.

From the first full pay period after 1 July 2016:

• Minimum rates of pay for adult full time employees covered by modern awards will increase by 2.4%.

• The national minimum wage for an award-free adult employee will increase by 2.4% to $672.70 per week or $17.70 per hour.

• There are also a number of expense related allowances in education industry awards expressed as a percentage of the “standard rate”, which is linked to the wage rate of a specific classification in the award. These allowances will also increase.

Determinations setting out the new rates of pay and allowances under the awards applicable to the education industry can be accessed here.

Enterprise agreements

Schools with enterprise agreements in operation (even if it has passed its nominal expiry date) must ensure that the base rate of pay in the agreement does not result in any employee being paid less than the relevant modern award pay rate or, if no award applies, the national minimum wage.

The new modern award rate increases will also form the baseline for the application of the “better off overall” test when the Fair Work Commission approves new enterprise agreements.

Increase to the high-income threshold and compensation limit

In addition to increases to modern award and minimum wages, from 1 July 2016, two other important monetary figures will increase:

• The high-income threshold increases from $136,700 to $138,900. This amount affects how a modern award applies to an employee, and affects an employee’s access to the unfair dismissal jurisdiction of the Fair Work Commission.

• The compensation limit under unfair dismissal laws also increases to $69,450. The compensation limit is the maximum compensation available to an employee successful in an unfair dismissal claim.

Schools need to be aware of these changes when assessing unfair dismissal eligibility and award and enterprise agreement compliance. Advice should also be sought if award coverage is unclear and the employee’s salary is close to the high-income threshold.